2024-06-13 11:31

KYIV, June 13 (Reuters) - Ukrainian nuclear firm Energoatom has carried out pre-winter maintenance on three of nine nuclear reactors and work is due to start on another in the coming days, it said on Thursday. Ukraine now relies mainly on three nuclear power plants for electricity after Russian missile attacks that have destroyed most of its thermal power plants and at least two hydro stations. Its fourth plant, Zaporizhzhia, was occupied by Russian forces in the first weeks of Moscow's 2022 invasion of the country. State-run Energoatom said maintenance is being carried out on power units at the Rivne, South Ukraine and Khmelnytskyi power plants. Recent Russian missile strikes have caused power outages in many regions and forced Kyiv to begin large-scale imports of electricity from the European Union. Power grid operator Ukrenergo said imports could total 27,671 Mwh on Thursday, slightly less than the record high 29,796 Mwh imported on Wednesday. Ukrenergo said it would continue to restrict power supplies to consumers on Thursday evening. Earlier this month, power limits were more significant, but planned maintenance to a nuclear unit could bring back the long blackouts. "In the next days, Energoatom will take out another 1,000 MW unit for repair. Taking this into account, as well as considering the increase in electricity consumption in July, the generation deficit in the power system may increase," Energoatom said. The company says that scheduled work this summer taking advantage of longer daylight hours will make it possible to reduce the duration of forced power cuts in the autumn. Sign up here. https://www.reuters.com/business/energy/ukraine-firm-completes-maintenance-3-nuclear-reactors-start-one-more-2024-06-13/

2024-06-13 11:28

Budget to reduce deficit by 35% over previous year Outcry over tax measures accompanying budget NAIROBI, June 13 (Reuters) - Kenya's 2024/25 budget is aimed at tackling the country's debt while protecting its fragile economic recovery at the same time, Finance Minister Njuguna Ndung'u said on Thursday. Ndung'u is due to present the budget later to parliament. In a statement after a ministerial cabinet meeting on Thursday ahead of the budget presentation, the presidency said that the budget will have a smaller deficit than the one for 2023/24. In April, the finance ministry forecast that economic growth would increase to 5.5% this year from 5.6% in 2023. "The budget today is going to emphasise the policies that we need to strengthen ... to support that fragile growth, that fragile economic recovery," he told reporters. "We want to make sure that we revive the economy so that it can generate jobs for the youth. We want to revive the economy so that we can pay our debt. We have been buffeted by that," he added. Total public debt stands at an estimated 68% of GDP for fiscal 2023/24, and is expected to fall to 64.8% in 2024/25, according to the World Bank. The East African nation sold a $1.5 billion international bond in February at a premium to fund the buyback of a large portion of a $2 billion bond maturing in June. Before that, investors had feared Kenya might not be able to repay the bond due to its strained public finances. Kenya's economy is largely driven by agriculture, manufacturing, transport and storage, financial and insurance services and real estate. Last week, parliament approved overall spending for the year at 4 trillion shillings ($31 billion), up from the 3.75 trillion shillings the minister presented last June for the 2023/24 year. That budget was later adjusted to 3.85 trillion shillings. The presidency said in its statement the 2024/25 budget sought to lower the deficit to 597 billion Kenyan shillings ($4.65 billion) from 925 billion shillings in the year to end-June. The 2024/25 budget will be accompanied by the Finance Bill 2024, a separate law outlining revenue-raising proposals which many critics say some could cripple sectors including financial and internet services, transport, manufacturing and retail. The proposals have drawn strong resistance from the public, bankers and manufacturers, as well as from the Law Society of Kenya, which stated its views to a parliamentary committee reviewing the measures. President William Ruto has said the measures are aimed at reducing Kenya's reliance on borrowing to fund its budget. Last week, the central bank governor said Kenya will use part of a $1.2 billion World Bank budget support loan to make a payment of roughly $500 million on a Eurobond maturing this month. ($1 = 128.5000 Kenyan shillings) Sign up here. https://www.reuters.com/markets/kenya-eyes-smaller-deficit-budget-aimed-protecting-economic-recovery-2024-06-13/

2024-06-13 11:24

KYIV, June 13 (Reuters) - Ukraine's central bank lowered its main interest rate to 13% on Thursday, its third rate cut this year, as policymakers seek to boost lending and support a large-scale campaign to restore the energy sector. Governor Andriy Pyshnyi said the central bank cut rates by 50 basis points as inflation has been lower than expected so far this year. The central bank expects inflation to pick up in the coming months but to remain moderate. "The central bank consistently pursues a policy that should support Ukraine's economic recovery," Pyshnyi told an online media briefing. "Over the past year, we have significantly lowered the rate from 25% to 13%." Following Russia's large-scale invasion in February 2022, the central bank hiked the key rate to 25% and imposed strict capital controls and other restrictions to maintain macroeconomic and financial stability. Ukraine's economy shrank by about one third in the first year of the war. The central bank started to cut the rate in June 2023 as Ukrainian businesses adjusted to war-time realities, the economy posted modest growth and inflation slowed. The latest cut was in line with policies aimed at supporting borrowing needed for Ukraine's wartime recovery and maintaining the appeal of holding savings in the local hryvnia currency. REBUILDING ENERGY SECTOR Pyshnyi said the central bank expected commercial banks' credit rates to fall and lending to increase. "We see that banks are capitalized and profitable today," he said. "Today, the Ukrainian economy needs proper resources to implement probably the largest restoration of energy-generating capacities in our history." Ukraine's energy sector was already damaged in the first winter of the war in 2022-2023 but Russia has intensified its bombardments since March, knocking out about half of the generating capacities and causing blackouts across the country. Energy Minister German Galushchenko told Reuters that Ukraine needs more air defences within weeks to allow energy repairs or it will not be able to meet demand in the winter. The government nearly doubled consumer electricity tariffs this month and the central bank said it would be one of the factors contributing to rising inflation going forward. In the first five months of the year, consumer inflation was below forecasts, reaching 3.3% year-on-year in May. The central bank has forecast inflation will rise to 8.2% by end-2024 and 6% by the end of next year. A key pillar of Ukraine's macroeconomic stability during the war was billions of dollars in Western financial aid. The central bank is expecting about $4 billion in financial support from the International Monetary Fund and the European Union in the coming weeks. The central bank reiterated that a total of $38 billion in economic aid from Kyiv's Western allies was expected this year. Next year the central bank expected $25 billion in foreign financing, said Serhiy Nikolaichuk, a deputy governor. The central bank last cut its key rate to 13.5% from 14.5% in April. Sign up here. https://www.reuters.com/markets/europe/ukraines-cbank-trims-key-rate-13-third-consecutive-cut-2024-06-13/

2024-06-13 11:24

LONDON, June 13 (Reuters) - The pound was headed for its fifth weekly gain against the euro on Thursday, having hit its highest in almost two years against the single European currency, which was rattled by political uncertainty in France. The euro fell to its lowest against the pound since late August 2022 this week, after the success of far-right parties in a European Union parliamentary election at the weekend prompted French President Emmanuel Macron to call a snap vote in his country, which spooked investors. The pound was already in the ascendant against the euro, which is already up almost 2.5% in value so far this year, mostly based on the expectation that UK rates will remain above those in the euro zone for some time to come. On Thursday, sterling was last flat against the dollar at $1.2798 and steady against the euro at 84.44 pence. Data on Wednesday that showed U.S. inflation cooled more quickly than expected in May prompted a sell-off in the dollar, boosting sterling 0.5%. The sell-off slowed after the U.S. Federal Reserve released its projections for interest rates, growth and inflation. On Thursday, the pound offered little reaction to the opposition Labour party's manifesto, released ahead of the July 4 general election. Data this week has painted a fairly stagflationary picture for the British economy, with wage growth still running hot, while economic growth had completely stalled in April. Traders expect at least one rate cut from the Bank of England this year, but the jury is out on whether or not there will be a second. The BoE meets next week. Futures markets currently show traders are placing a 75% chance of a cut by September, with a cut fully priced in for November. "Because market pricing is already so hawkish, there are risks of a larger market reaction if the BoE appears relatively unconcerned about recent strong data. We continue to expect two BoE cuts this year in August and November," Nomura economists led by George Buckley said in a note. The pound, meanwhile, has been steadily gaining ground. So far this year, it's the only major currency in positive territory against the dollar, with a rise of 0.5%. The nearest rival is the offshore Chinese yuan , which has weakened by 2%. On a trade-weighted basis, the pound is at its highest since the Brexit vote in June 2016. Sign up here. https://www.reuters.com/world/uk/sterling-set-fifth-weekly-gain-against-euro-after-shock-french-election-call-2024-06-13/

2024-06-13 11:13

CARACAS, June 13 (Reuters) - Transactions paid with foreign credit cards are helping circulate more foreign currency in Venezuela, where the government has locked in an exchange rate as part of efforts to control double-digit inflation, four public sector and finance sources said. The transactions have been growing steadily since the government of President Nicolas Maduro, who is running for reelection in July, loosened currency controls five years ago, allowing an expanded use of U.S. dollars alongside the local bolivar currency. When Venezuelans with bank accounts abroad use foreign cards, their bank outside Venezuela sends the funds to its local intermediary bank in dollars. The local bank can then sell the dollars, adding to the limited supply of foreign currency and helping the government to keep the exchange rate at 36.4 bolivars to the dollar and control inflation, which was 59.2% in the 12 months to May. Maduro's government is seeking to raise its tax take so it will have funds to direct toward public workers, sources told Reuters, as it seeks to win their support at the polls. "This foreign currency helps support the exchange market," said a public sector source who asked not to be named. About 11% of transactions at supermarkets, pharmacies and other businesses are made with international cards, up from 8%last year, local analyst Ecoanalitica said in March. Some $60 million per month from transactions on foreign credit and debit cards is sold by local banks, according to finance industry estimates. Buyers are often retail or industrial businesses in need of foreign currency to pay for imports. Other dollars come from the central bank and from export earnings from Chevron (CVX.N) New Tab, opens new tab, which operates in the country with a special license from Washington. Both those sources contribute about $200 million each per month, according to calculations from local analysts firm Sintesis Financiera. Although the dollars circulating via foreign card transactions was less than from other sources, banking sources said the funds help ease pressure on the market. The central bank did not respond to a request for comment, nor did the finance ministry. In 2023, foreign exchange from international cards reached $900 million, according to banking sources. U.S. sanctions have halted some international transfers, as the central bank and some local banks were left without partner banks that would allow them to move money in and out of Venezuela. Other banks still have partners abroad. U.S. sanctions are largely focused on members of Maduro's government and the oil industry and do not restrict private Venezuelan businesses from operating abroad. Foreign cards "offer a bit of oxygen because many people can't access bolivars," said economist Jesus Palacios, referring to credit restrictions on bolivar-denominated credit cards. Sign up here. https://www.reuters.com/business/finance/foreign-credit-card-transactions-add-scarce-dollars-venezuela-circulation-2024-06-13/

2024-06-13 10:59

LONDON, June 13 (Reuters) - Brookfield Asset Management is looking to raise $5 billion for a fund backed by the United Arab Emirates (UAE) that aims to scale up climate finance in emerging markets, the Canadian company said on Thursday. The fund, dubbed the Catalytic Transition Fund (CTF), was announced at the COP28 climate talks in Dubai last December, but this is the first time Brookfield has confirmed its target size. Anchored by a $1 billion commitment from the $30 billion UAE-based ALTÉRRA fund, the first close of the CTF is expected by the end of 2024, Brookfield said in a statement. The first close of a fund refers to when it has secured enough commitments to start making investments. Excluding China, developing economies get less than 15% of the world's clean energy dollars despite being responsible for nearly a third of global emissions, and as a result investments there can often have a bigger impact, Brookfield said. Returns to the ALTÉRRA fund will be capped at an unspecified amount, allowing other investors to secure better risk-adjusted returns. At least 10% of the fund's capital will be provided by Brookfield, which manages $925 billion in assets. "The Catalytic Transition Fund is a private market solution to the global challenge of delivering transition investment to emerging markets," said Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management. ALTÉRRA Chief Executive Majid Al-Suwaidi said the world needed to pick up the pace "significantly" on addressing climate change and its investment in the CTF would "supercharge investment in emerging markets". Sign up here. https://www.reuters.com/sustainability/sustainable-finance-reporting/brookfield-eyes-5-bln-uae-backed-climate-fund-2024-06-13/